Owning a residential rental property is a sound investment strategy. It diversifies your financial portfolio and provides passive income. If it has a high vacancy rate, though, you could be losing money.
Strategies in lowering a residential rental property’s vacancy rate are more than just taking photos and posting them on an online real estate marketplace. You should know what affects the local rental market and tenant behavior. With a focus on the latter, this article aims to point out the possible reasons why your property remains vacant.
Insufficient Listings and Unattractive Advertisements
Two of the top possible reasons why residential rental properties remain vacant are inadequate listings to reach potential clients and unattractive ads. Your listings and the photos you use for them go hand in hand. You may not be reaching enough of your potential tenants. If your listings do reach them, though, your ads are not attractive enough to them.
Increasing listings will enable you to reach a wider audience. This will generate more inquiries and could attract more quality tenants.
Post your property in online real estate marketplaces such as Zillow, Realtor, Trulia, Foreclosure.com, Apartments.com, and many others. But don’t stop there. Use social media, other marketplaces, online publications, and industry-related websites. Unless you purchase ad placements, you can promote your property through social media and other marketplaces for free. And speaking of ads, you can buy placements in online newspapers and magazines and real estate-related websites.
To gain the attention of your target market, use captivating photos of your property. Using a DSLR camera with a wide-angle lens can significantly improve the quality of pictures that you’ll use. When taking pictures, make sure there is enough lighting and rooms are clutter-free.
Pricing Is Not Up to Fair Market Rent
According to iProperty Management, the general rule in determining the price of a rental property is that rates are low when vacancy is high. Unfortunately, many private landlords do not follow this rule. They declare rates based on their personal perception of the value of their property’s aesthetics, features, and amenities. While all of this can help, relying on these factors often leads to higher rates and higher vacancies.
The key to declaring prices that adhere to market rates is approaching it from a financial point of view. It would help if you considered fixed costs such as utilities, property taxes, and mortgage payments. After using this as a baseline, you need to check out other similar properties in your area and how much their rates are. In general, however, rates can be affected by a property’s location, size, age, number of bathrooms and bedrooms, and type of residential building.
Lack of Features and Amenities
Tenants always choose properties near public amenities such as schools, parks, supermarkets, and hospitals when looking for an ideal home. These amenities are essential for families. Properties near transportation hubs, commercial centers, and business districts are also more attractive to potential tenants.
Location is another major factor that contributes to vacancy. Tenants want to live in a safe, secure, and clean neighborhood. Thus, there must be proper street lighting. Also, municipal street sweepers must clean the surroundings regularly. If necessary, there should be fences or any secure physical barriers around your property.
Tenants also prefer properties with a good bedroom-to-bathroom ratio and adequate room sizes. Properties with essential appliances such as a stove, fridge, washer and dryer, and HVAC unit are more popular to tenants.
To make your property more enticing, add in some bonus. Provide high-speed Wi-Fi and energy-efficient appliances and lighting. Young tenants today often prefer sustainable living conditions while constantly connected to the internet.
Your property’s structure and interior and outdoor features should be appealing, too. Tenants want modern and visually attractive interiors and facades. The structure must be updated and adhere to safety standards, too.
Not Allowing Virtual Tours
COVID-19 forced people to stay home. However, health and safety protocols have created a challenge for rental property owners and managers, especially those in the process of renting out properties. They cannot show properties in person to potential tenants. As a result, virtual tours are now the norm when showing properties.
Virtual tours offer a way for potential tenants to view a property even without setting their foot in it. It is the safest way of showing properties that is contact-less and touch-free. You can host virtual tours in three ways: panoramic tours, self-guided virtual tours or walkthroughs, and interactive floor plan tours.
Don’t Let Time Pass You By
Lower your vacancy using the tips above and if you see any other possible reasons, take action. Don’t let any of these reasons negatively affect your passive income and investment. Do something about it today.